With profits endowments and savings plans performance history

The table below shows the investment returns over the last five years for the assets that specific with profits endowments and savings plans invest in.

Annual investment returns

Product

2014

2015

2016

2017

2018

Unitised life policies including:

Capital Accumulation Plan

Capital Investment Portfolio

Capital Preservation Plan

Flexible Investment Plan

Flexible Mortgage Plan

Flexible Protection Plan

Unit Savings (Prospects and New Savings Plan)

8%

3%

13%

8%

-3%

Conventional life policies including:

Build Up

Cashbuilder

Endowment

Low Start Build Up

Progressive Build Up Plus

Progressive Flexible Build Up

Progressive Investment

Treasure Chest

Whole of Life Plan

7%

3%

13%

8%

-3%

Performance is for calendar years, 1 January to 31 December. The investment returns shown are after tax but before we have taken off investment expenses and any plan charges. Please note that all investment returns are rounded to the nearest percent.

With profits endowments and savings plans investment mix

The money invested in a with profits endowment or savings plan is combined with money from other with profits investors in the With Profits Fund. The With Profits Fund invests in a mix of assets, such as UK and overseas shares, fixed interest securities and commercial property.

While everyone is invested together in the With Profits Fund, the investment approach may vary depending on the type of plan held. This may be for a number of reasons, one of which is to reflect the features and benefits of different with profits products.

The table below shows the asset mix for our with profits endowments and savings plans as at 31 December 2018.

ASSET MIX AS AT 31 DECEMBER 2018

PRODUCT

UK SHARES

OVERSEAS SHARES

FIXED INTEREST SECURITIES

COMMERCIAL PROPERTY

Other

Unitised life policies including:

Capital Accumulation Plan

Capital Investment Portfolio

Capital Preservation Plan

Flexible Investment Plan

Flexible Mortgage Plan

Flexible Protection Plan

Unit Savings (Prospects and New Savings Plan)

Conventional life policies including:

Build Up

Cashbuilder

Endowment

Low Start Build Up

Progressive Build Up Plus

Progressive Flexible Build Up

Progressive Investment

Treasure Chest

Whole of Life Plan

18%

27%

39%

12%

4%

The asset mixes for individual products depend on the product type and the date the investment was made.
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Factors affecting the bonus rates

The returns, or bonuses, added to a plan over the years will not be the same as the returns shown in the tables in the performance history section above.

Investment returns, less any tax applicable, are the most important factor in deciding how much bonus we pay. These depend on the mix of assets your policy is invested in and how these assets have performed.

We also consider the following:

Historic investment returns experienced over the period of your investment.

Bonuses already declared.

Our view of future investment conditions.

When you started your policy.

The effects of smoothing. Smoothing aims to even out some of the short-term ups and downs that may be experienced when investing in the stock market or other investments. You can find more information on smoothing in our Understanding Smoothing factsheet.

The type of with profits policy you have and the terms of your policy, including the type and extent of any guarantees.

Money built up in the With Profits Fund that is over and above what we expect to need for future obligations such as tax, expenses and future bonuses to policyholders.

Following the closure of the With Profits Fund to new business on 31 January 2015, we have considered annually whether to distribute part of this money. For the bonus declaration for 2018, we’ve added 0.3% to the value of the underlying assets. This value is not added directly to your bonus rate but is allowed for when we work out what bonus you are entitled to.

The costs of running your policy. With effect from 1 January 2018, most of the costs of running your policy were fixed until 30 June 2019 under an expense agreement. Legal & General may extend this agreement by up to six months.

Any other adjustments, for example to cover an increase in the cost of guarantees and options.

For the bonus declaration for 2018, we’ve added 0.2% to the value of the underlying assets. This value is not added directly to your bonus rate but is allowed for when we work out what bonus you are entitled to.